Problem 11 contains details of a rights offering by Pandora Box. Suppose that the company had decided

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Problem 11 contains details of a rights offering by Pandora Box. Suppose that the company had decided to issue new stock at $4. How many new shares would it have needed to sell to raise the same sum of money? Recalculate the answers to questions (b) to (d) in question 11. Show that the shareholders are just as well off if the company issues the shares at $4 rather than $5.

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Principles of Corporate Finance

ISBN: 978-0072869460

7th edition

Authors: Richard A. Brealey, Stewart C. Myers

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